It was more than 12 years ago: December 2005. Median home prices in Lee County peaked at $322,300 in a frenzied market fueled by speculators — investors looking to quickly buy and sell homes to make a fast buck.

Flippers and sellers were cashing in, while buyers looking to get into a home and own it for the long run thought the market was terrible.

But wait to buy, and prices might go up even higher.

So what could go wrong?

The answers started coming fast and furiously beginning in 2006 and 2007 as the script got flipped and home prices took a nosedive over four years.

Construction in Southwest Florida grinded to a halt, taking many jobs (from skilled trades to mortgage brokers) along with it.

Lee County’s unemployment rate spiked past 13 percent in 2009 and 2010, with the county becoming one of the country’s capitals for foreclosures and short sales, with national publications like The New York Times swooping in to broadcast the region’s tale of woe to the masses.

The rapid fall in prices trapped many people in their homes. They owed more on the home than it was worth, so a sale made no sense. Neither did paying $2,000 a month for a $150,000 home when they were out of work. Some stayed in their homes until the banks kicked them out. Many just walked away.

Fort Myers, Cape Coral and Lehigh Acres were among the cities feeling the sharpest effects as the nation’s economy went into a tailspin in what came to be known as the Great Recession.

In a flash, the boom market that had been “working strictly off momentum and hysteria," according to real estate expert Denny Grimes, had turned into a bust. Fast-forward 10 years and many people are still suffering some of the effects.

While workers these days have jobs, they may be employed in a role that pays less.

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The News-Press Market Watch real estate event is coming up, Denny Grimes, Realtor and Professional Speaker, will be speaking at the 2018 event and gives a feel for what will be going on that evening.
Andrea Melendez/news-press.com

While people might not be living on the streets, they may be struggling to pay rent or to reenter the market as homeowners.

And while many might still have retirement accounts, those accounts may be meager because they were drained during the recession or went unfed in the recovery.

Talk to real estate experts these days, and you hear a seemingly boring word like “stable” in describing the housing market, rather than a sexy word like “skyrocketing.”

“I know at least four guys who took their own life in my profession because of the economic strains.”

Stan Stouder

Stouder remembered what he called the “vacuuming of tenants from commercial buildings.”

“They had no money, had no goods and services. Tenants defaulted,” he said. “Owners had no rental income so they could not pay their mortgages. It was dominoes. It was just awful.”

Because there was suddenly so much available commercial space, there was little need for new construction. Commercial permits dropped more than 90 percent. It was all cause for reflection.

“It really showed me how money is not a priority in life,” he said. “A lot of people are defined by how much they have and I wasn’t that guy. If money does define you, you’re always vulnerable. My motives to make more of it are much more about others and much less about me.”

Through good times and bad, the factors driving the Southwest Florida market remain the same: water, warmth and way of life, as Grimes puts it. So when one of those is compromised, such as icky water flowing down the river and into the Gulf due to discharges from Lake Okeechobee, potential buyers take notice.

“You screw up our water, you’re screwing up our market,” Grimes said. “It’s a fuse that has been lit. You develop a bad impression and people are not coming back.”

Of course, that doesn’t mean that people aren’t still buying, despite water woes and Hurricane Irma.

So how is the market doing these days? Grimes said that’s like stopping by a hospital and asking how the patients are feeling. A new mother may be feeling great, while someone in the ICU may be suffering.

“The answer is, it depends,” he said.

Grimes said the sweet spot for housing in Lee County, which is performing “extremely well,” is $250,000 to $300,000. In Collier County, it’s anything under $500,000.

“People arriving here have Naples in their hearts, but they may have some other areas in their pocketbook,” he said.

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The News-Press Market Watch real estate event is coming up. Stan Stouder, founder of CRE Consultants, will be speaking at the 2018 event. He gives a feel for what will be going on that evening.
Andrea Melendez/news-press.com

However, Grimes predicted buyers may soon get a little more for their money, so those watching the market should prepare for what’s on the horizon.

“Overall, there’s growing inventory and prices are softening, and that is around the country,” he said. “We’re due. The real estate market is due for another little shift. We’re overdue.”

The median home price in Lee is around $236,000: “where it should be. The market itself is rational. It’s a user-driven market.”

The Cape Coral-Fort Myers market ranked No. 20 on a list of the “25 best cities for flipping a house,” according to a Money magazine article in May. The return on investment in the market was 41 percent, with the average flip taking 198 days.

Grimes said there is a potential bubble forming in some areas of Naples and a continued push north and east for more affordable housing, made possible by cheaper land. That’s particularly true for consumers looking to buy new construction.

“Things are pushing north,” he said the day before Thanksgiving. “Charlotte County should be sending us a fruit cake for Christmas because we’re sending our customers to them.”